Electronic billing improves cash flow
25 Apr 2009 by M Reeves
Electronic patient billing systems are more than just convenient tools for private medical practices. They’re also proven to increase cash flow, which can greatly better the financial health of your group. Cash flow is the amount of money coming into and going out of your business. Increased cash flow usually means a more efficient business.
Here’s how using electronic billing can increase your cash flow. Electronic billing gets bills to insurers in less time than traditional paper bills. With paper bills, it can take over a month to receive a cheque from an insurance company because the invoice has to be finished by hand, sent through the mail, evaluated for correct procedure by insurers, paid and sent back to the practice. If there are problems when the payment finally arrives, the entire process has to be repeated. Electronic billing eliminates many of the intermediate steps in the payment process; billing information is sent directly from private practices to insurers via the Internet. And some electronic billing systems, like Healthcode’s VEDA, automatically check to make sure invoices are filled out properly, so there’s no need to worry about claims being slowed down. With electronic billing like VEDA, healthcare providers can receive payments in as little as five days after an invoice is written.
Whereas with paper billing, monthly gross income likely reflects services performed the previous month, with electronic billing your gross income will correlate to more recent procedures. This means you’re incoming payments will be a more accurate gauge of your recent productivity.
When bills are paid in a timelier manner, cash flow increases. Increased cash flow provides better peace of mind because specialists can be sure that they’ve received the money they’re owed. But more than that, increased cash flow allows for more options in your practice. With money being paid quickly, you’ll have funds on hand to purchase new equipment, pay employees and buy supplies. Basically, you’ll be able to grow as a company because you’ll have money to invest. Of course, with better cash flow your own salary will be affected as well; increased cash flow means more money is available to take home.
Cash flow is what allows businesses to function; increased cash flow, therefore, will also increase efficiency. Think about all the things you could do with more efficient earnings collection. If you budget correctly, you’ll have a surplus of incoming cash, which means more profit. Without adequate incoming cash, costs can be higher than earnings. Electronic billing prevents this from happening.
